Morgans is not surprised by the muted share price response to the legal action against Acland 3 as no value had previously been recognised by the market.
The High Court has upheld an appeal against Acland 3’s approvals, ordering the project’s mining lease and environmental authority applications back to the Queensland Land Court for reconsideration.
Although disappointing news to the broker, there is considered to be compelling upside based on Bengalla’s cash flow alone. Additionally, a significantly improved thermal coal price is seen as a pathway to de-gearing and resumption of dividends.
The Add rating is unchanged and the target price is increased to $1.60 from $1.53.
Sector: Energy.
Target price is $1.60.Current Price is $1.33. Difference: $0.27 – (brackets indicate current price is over target). If NHC meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
